H. Rept. 115-653 - SMALL BUSINESS DEVELOPMENT CENTER CYBER TRAINING ACT OF 2017115th Congress (2017-2018)
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115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-653
======================================================================
SMALL BUSINESS DEVELOPMENT CENTER CYBER TRAINING ACT OF 2017
_______
April 25, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Chabot, from the Committee on Small Business, submitted the
following
R E P O R T
[To accompany H.R. 3170]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 3170) to amend the Small Business Act to require
cyber certification for small business development center
counselors, and for other purposes, having considered the same,
report favorably thereon without amendment and recommend that
the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary........................................1
II. Need for Legislation............................................2
III. Hearings........................................................2
IV. Committee Consideration.........................................3
V. Committee Votes.................................................3
VI. Section-by-Section of H.R. 3170, as Amended.....................5
VII. Congressional Budget Office Cost Estimate.......................5
VIII. Unfunded Mandates...............................................6
IX. New Budget Authority, Entitlement Authority, and Tax Expenditure6
X. Oversight Findings..............................................6
XI. Statement of Constitutional Authority...........................7
XII. Congressional Accountability Act................................7
XIII. Federal Advisory Committee Act Statement........................7
XIV. Statement of No Earmarks........................................7
XV. Statement of Duplication of Federal Programs....................7
XVI. Disclosure of Directed Rule Makings.............................7
XVII. Performance Goals and Objectives................................7
XVIII.Changes in Existing Law Made by the Bill, as Reported...........7
I. Purpose and Bill Summary
The purpose of H.R. 3170, the ``Small Business Development
Center Cyber Training Act of 2017,'' is to amend the Small
Business Act (the Act)\1\ to help Small Business Development
Centers (SBDCs) become better trained to assist small
businesses with their cyber security and cyber strategy needs.
Specifically, the bill would establish a cyber counseling
certification program in lead SBDCs to better assist small
businesses with planning and implementing cybersecurity
measures to defend against cyber attacks. The Small Business
Administration (SBA) would be authorized to reimburse SBDCs for
employee certification costs up to $350,000 per fiscal year.
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\1\Originally, title II of the Act of July 30, 1953, 67 Stat. 232,
was designated as the Small Business Act of 1953. A plethora of
amendments in subsequent Congresses led to a rewrite in 1958. Pub. L.
No. 85-536, Sec. 1, 72 Stat. 384 (1958). The Act is codified at 15
U.S.C. Sec. 631-657s.
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II. Need for Legislation
H.R. 3170 was introduced by Chairman Steve Chabot and
Representative Dwight Evans (D-PA) on July 10, 2017 after a
number of hearings to examine small businesses' need for
cybersecurity resources. The Committee determined a significant
challenge facing small businesses seeking to strengthen their
cybersecurity posture is a lack of access to cybersecurity
resources and inadequately trained employees. The Committee
also learned that many small businesses were unaware of
existing federal cybersecurity resources and they would benefit
from guidance provided by cyber trained professionals.
III. Hearings
In the 115th Congress, the Committee held four hearings
that explored the issues covered by H.R. 3170. On November 8,
2017, the Committee on Small Business met for a hearing titled,
``Federal Government and Small Businesses: Promoting Greater
Information Sharing for Stronger Cybersecurity.''\2\ The
hearing examined how federal agencies can encourage greater
information sharing with small businesses and provide timely
assistance and resources when a cyber attack occurs.
Additionally, the hearing examined the policies that discourage
small businesses from engaging with federal agencies for
cybersecurity assistance. The witness panel discussed the
importance of information sharing between small businesses and
the federal government while also acknowledging that
information sharing policies could be improved. One witness
discussed some of the needs and challenges surrounding cyber
information sharing, including fragmentation, overuse of
classification, and improving the collection and dissemination
of information. Another witness testified that small
businesses' reluctance to share cybersecurity information could
be reduced by expanding Cybersecurity Information Sharing Act
(CISA) protections for small businesses and providing tax
incentives. Witnesses also testified that the federal
government could better protect small businesses in three ways:
improving information sharing activities; making cybersecurity
frameworks and best practices more workable for small
businesses; and ensuring a legal and policy environment that
enhances small businesses' abilities to manage cyber risks. A
fourth witness discussed a few of the federal information
sharing programs currently available to small businesses
through agencies such as the Department of Homeland Security
(DHS). He also made recommendations to improve cybersecurity
for small businesses, such as moving to the cloud and
encouraging cyber insurance for small businesses.
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\2\Federal Government and Small Businesses: Promoting Greater
Information Sharing for Stronger Cybersecurity: Hearing Before the H.
Comm. On Small Bus., 115th Cong. (2017).
---------------------------------------------------------------------------
On January 30, 2018, the Committee on Small Business met
for a hearing titled, ``Small Business Information Sharing:
Combating Foreign Cyber Threats.''\3\ The hearing examined H.R.
4668, the Small Business Advanced Cybersecurity Enhancements
Act of 2017, and discussed how federal agencies are
facilitating greater information sharing with small businesses
that are vulnerable to foreign-backed cyber attacks. The
Committee heard directly from the Federal Bureau of
Investigation (FBI) and DHS.
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\3\Small Business Information Sharing: Combating Foreign Cyber
Threats: Hearing Before the H. Comm. On Small Bus., 115th Cong. (2018).
---------------------------------------------------------------------------
The panel discussed the importance of increasing
cybersecurity awareness for small businesses, as they can
easily fall victim to foreign cyber attacks. The FBI witness
testified that both the number and sophistication of cyber
threats is on the rise. They listed a number of prevalent cyber
threats that are specific to small businesses, including
business email compromise, ransomware, and the Internet of
Things. The FBI witness also testified that their Cyber
Division regularly coordinates initiatives for engagement with
private sector partners with the goal of ultimately closing
intelligence gaps. DHS echoed much of the FBI's perspective,
saying that cyber threats remain one of the most significant
risks for small businesses. They discussed DHS' resources for
assisting small businesses, including the National
Cybersecurity and Communications Integration Center, or NCCIC.
DHS's witness also testified that they have been working with
SBA to develop a strategy to effectively respond to small
businesses' cybersecurity needs, as directed by the National
Defense Authorization Act for Fiscal Year 2017.\4\ Both
agencies also endorsed H.R. 4668, testifying that it would
provide small businesses with greater access to cybersecurity
information and ultimately encourage further information
sharing between the public and private sectors.
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\4\Pub. L. No. 114-328, 130 Stat. 2662.
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IV. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on March 14, 2018 and ordered H.R. 3170
reported to the House. During the markup, no amendments were
offered.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted 19-0 to report H.R. 3170, to the
House at 11:36 am.
VI. Section-by-Section of H.R. 3170, as Amended
Section 1. Short title
This section designates the bill as the ``Small Business
Development Center Cyber Training Act of 2017.''
Section 2. Duties of the Small Business Development Center Counselors
This section amends Section 21(a) of the Small Business Act
by adding Cyber Strategy Training for Small Business
Development Centers. The section requires the Small Business
Administrator to establish, or certify, an existing cyber
counseling certification program to certify employees at small
business development centers (that have directly received a
grant from the Administration) to provide assistance to small
businesses for planning cybersecurity practices and strategies
to respond to cyber attacks. The bill requires that at least
five (5) employees, or ten (10) percent of the total number of
employees, be certified to provide cyber planning assistance to
small businesses.
The Small Business Administrator is instructed to consider
cyber strategy methods included in the Small Business
Development Center's Cyber Strategy that was developed pursuant
to section 1841(a) of the National Defense Authorization Act
for Fiscal Year 2017 (Public Law 114-328; 130 Stat. 2662).
The Small Business Administrator is also instructed to
reimburse lead small business development centers for any costs
relating to cyber strategy training certification of an
employee up to $350,000 in a fiscal year.
VII. Congressional Budget Office Cost Estimate
The Congressional Budget Office submitted a cost estimate
for H.R. 3170 that stated enacting the legislation would not
increase net direct spending or on budget deficits in any of
the four consecutive periods beginning in 2028.
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 18, 2018.
Hon. Steve Chabot,
Chairman, Committee on Small Business, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3170, the Small
Business Development Center Cyber Training Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 3170--Small Business Development Center Cyber Training Act of 2017
H.R. 3170 would require the Small Business Administration
(SBA) to develop a cyber counseling certification program and
provide grants to small business development centers (SBDCs) to
assist small businesses with cyber security planning. Under the
bill, the SBA would be authorized to spend no more than
$350,000 each year to reimburse SBDCs for the cost of
certifying their staff through the program. Based on that limit
and using information from the SBA, CBO estimates that
implementing the bill would cost less than $500,000 annually
for the agency to develop training materials and to reimburse
as many as 63 SBDCs; such spending would be subject to the
availability of appropriated funds.
Enacting H.R. 3170 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 3170 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
H.R. 3170 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
On September 11, 2017, CBO transmitted a cost estimate for
S. 1428 the Small Business Cyber Training Act of 2017, as
ordered reported by the Senate Committee on Small Business and
Entrepreneurship on August 2, 2017. The bills are similar and
CBO's estimates of their budgetary effects are the same.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
VIII. Unfunded Mandates
H.R. 3170 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act, Public
Law No. 104-4, and would impose no costs on state, local, or
tribal governments.
IX. New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement
authority, and tax expenditures. While the Committee has not
received an estimate of new budget authority contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to 402 of the Congressional Budget Act
of 1974, the Committee does not believe that there will be any
additional costs attributable to this legislation. H.R. 3170
does not direct new spending, but instead reallocates funding
independently authorized and appropriated.
X. Oversight Findings
In accordance with clause 2(b)(1) of rule X of the Rules of
the House, the oversight findings and recommendations of the
Committee on Small Business with respect to the subject matter
contained in H.R. 3170 are incorporated into the descriptive
portions of this report.
XI. Statement of Constitutional Authority
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House, the Committee finds that the authority for this
legislation in Art. I, Sec. 8, cl. 2; Art. I, Sec. 8, cl. 7;
and, Art. I, Sec. 8 cl. 12.
XII. Congressional Accountability Act
H.R. 3170 does not relate to the terms and conditions of
employment or access to public services or accommodations
within the meaning of 102(b)(3) of Public Law No. 104-1.
XIII. Federal Advisory Committee Act Statement
H.R. 3170 does not establish or authorize the establishment
of any new advisory committees as that term is defined in the
Federal Advisory Committee Act, 5 U.S.C. App. 2.
XIV. Statement of No Earmarks
Pursuant to clause 9 of rule XXI of the Rules of the House,
H.R. 3170 does not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits as defined in
subsections (d), (e), or (f) of clause 9 of rule XXI of the
Rules of the House.
XV. Statement of Duplication of Federal Programs
Pursuant to clause 3(c) of the rule XIII of the Rules of
the House, no provision of H.R. 3170 establishes or
reauthorizes a program of the federal government known to be
duplicative of another federal program, a program that was
included in any report from the United States Government
Accountability Office pursuant to 21 of Pub. L. No. 111-139, or
a program related to a program identified in the most recent
catalog of federal domestic assistance.
XVI. Disclosure of Directed Rule Makings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House, H.R. 3170 does not direct any rule making.
XVII. Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
H.R. 3170 includes a number of provisions designed to
increase Small Business Development Center preparedness to
assist small business concerns with cybersecurity related
activities.
XVIII. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause (E) of rule XIII of the Rules of
the House, changes in existing law made by the bill, as
reported, as shown as follows existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
Sec. 21. (a)(1) The Administration is authorized to make
grants (including contracts and cooperative agreements) to any
State government or any agency thereof, any regional entity,
any State-chartered development, credit or finance corporation,
any women's business center operating pursuant to section 29,
any public or private institution of higher education,
including but not limited to any land-grant college or
university, any college or school of business, engineering,
commerce, or agriculture, community college or junior college,
or to any entity formed by two or more of the above entities
(herein referred to as ``applicants'') to assist in
establishing small business development centers and to any such
labor for: small business oriented employment or natural
resources development programs; studies, research, and
counseling concerning the managing, financing, and operation of
small business enterprises, management and technical assistance
regarding small business participation in international
markets, export promotion and technology transfer; delivery or
distribution of such services and information; providing access
to business analysts who can refer small business concerns to
available experts; and, to the extent practicable, providing
assistance in furtherance of the Small Business Development
Center Cyber Strategy developed under section 1841(a) of the
National Defense Authorization Act for Fiscal Year 2017:
Provided, That after December 31, 1990, the Administration
shall not make a grant to any applicant other than an
institution of higher education or a women's business center
operating pursuant to section 29 as a Small Business
Development Center unless the applicant was receiving a grant
(including a contract or cooperative agreement) on such date.
The Administration shall require any applicant for a small
business development center grant with performance commencing
on or after January 1, 1992 to have its own budget and to
primarily utilize institutions of higher education and women's
business centers operating pursuant to section 29 to provide
services to the small business community. The term of such
grants shall be made on a calendar year basis or to coincide
with the Federal fiscal year.
(2) Cooperation to provide international trade
services.--
(A) Information and services.--The small
business development centers shall work in
close cooperation with the Administration's
regional and local offices, the Department of
Commerce, appropriate Federal, State and local
agencies (including State trade agencies), and
the small business community to serve as an
active information dissemination and service
delivery mechanism for existing trade
promotion, trade finance, trade adjustment,
trade remedy and trade data collection programs
of particular utility for small businesses.
(B) Cooperation with state trade agencies and
export assistance centers.--A small business
development center that counsels a small
business concern on issues relating to
international trade shall--
(i) consult with State trade agencies
and Export Assistance Centers to
provide appropriate services to the
small business concern; and
(ii) as necessary, refer the small
business concern to a State trade
agency or an Export Assistance Center
for further counseling or assistance.
(C) Definition.--In this paragraph, the term
``Export Assistance Center'' has the same
meaning as in section 22.
(3) The Small Business Development Center Program shall be
under the general management and oversight of the
Administration for the delivery of programs and services to the
small business community. Such programs and services shall be
jointly developed, negotiated, and agreed upon, with full
participation of both parties, pursuant to an executed
cooperative agreement between the Small Business Development
Center applicant and the Administration.
(A) Small business development centers are authorized to form
an association to pursue matters of common concern. If more
than a majority of the small business development centers which
are operating pursuant to agreements with the Administration
are members of such an association, the Administration is
authorized and directed to recognize the existence and
activities of such an association and to consult with it and
develop documents (i) announcing the annual scope of activities
pursuant to this section, (ii) requesting proposals to deliver
assistance as provided in this section and (iii) governing the
general operations and administration of the Small Business
Development Center Program, specifically including the
development of regulations and a uniform negotiated cooperative
agreement for use on an annual basis when entering into
individual negotiated agreements with small business
development centers.
(B) Provisions governing audits, cost principles and
administrative requirements for Federal grants, contracts and
cooperative agreements which are included in uniform
requirements of Office of Management and Budget (OMB) Circulars
shall be incorporated by reference and shall not be set forth
in summary or other form in regulations.
(C) Whereas On an annual basis, the Small Business
Development Center shall review and coordinate public
and private partnerships and cosponsorships with the
Administration for the purpose of more efficiently
leveraging available resources on a National and a
State basis.
(4) Small business development center program level.--
(A) In general.--The Administration shall require as
a condition of any grant (or amendment or modification
thereof) made to an applicant under this section, that
a matching amount (excluding any fees collected from
recipients of such assistance) equal to the amount of
such grant be provided from sources other than the
Federal Government, to be comprised of not less than 50
percent cash and not more than 50 percent of indirect
costs and in-kind contributions.
(B) Restriction.--The matching amount described in
subparagraph (A) shall not include any indirect costs
or in-kind contributions derived from any Federal
program.
(C) Funding formula.--
(i) In general.--Subject to clause (iii), the
amount of a formula grant received by a State
under this subparagraph shall be equal to an
amount determined in accordance with the
following formula:
(I) The annual amount made available
under section 20(a) for the Small
Business Development Center Program,
less any reductions made for expenses
authorized by clause (v) of this
subparagraph, shall be divided on a pro
rata basis, based on the percentage of
the population of each State, as
compared to the population of the
United States.
(II) If the pro rata amount
calculated under subclause (I) for any
State is less than the minimum funding
level under clause (iii), the
Administration shall determine the
aggregate amount necessary to achieve
that minimum funding level for each
such State.
(III) The aggregate amount calculated
under subclause (II) shall be deducted
from the amount calculated under
subclause (I) for States eligible to
receive more than the minimum funding
level. The deductions shall be made on
a pro rata basis, based on the
population of each such State, as
compared to the total population of all
such States.
(IV) The aggregate amount deducted
under subclause (III) shall be added to
the grants of those States that are not
eligible to receive more than the
minimum funding level in order to
achieve the minimum funding level for
each such State, except that the
eligible amount of a grant to any State
shall not be reduced to an amount below
the minimum funding level.
(ii) Grant determination.--The amount of a
grant that a State is eligible to apply for
under this subparagraph shall be the amount
determined under clause (i), subject to any
modifications required under clause (iii), and
shall be based on the amount available for the
fiscal year in which performance of the grant
commences, but not including amounts
distributed in accordance with clause (iv). The
amount of a grant received by a State under any
provision of this subparagraph shall not exceed
the amount of matching funds from sources other
than the Federal Government, as required under
subparagraph (A).
(iii) Minimum funding level.--The amount of
the minimum funding level for each State shall
be determined for each fiscal year based on the
amount made available for that fiscal year to
carry out this section, as follows:
(I) If the amount made available is
not less than $81,500,000 and not more
than $90,000,000, the minimum funding
level shall be $500,000.
(II) If the amount made available is
less than $81,500,000, the minimum
funding level shall be the remainder of
$500,000 minus a percentage of $500,000
equal to the percentage amount by which
the amount made available is less than
$81,500,000.
(III) If the amount made available is
more than $90,000,000, the minimum
funding level shall be the sum of
$500,000 plus a percentage of $500,000
equal to the percentage amount by which
the amount made available exceeds
$90,000,000.
(iv) Distributions.--Subject to clause (iii),
if any State does not apply for, or use, its
full funding eligibility for a fiscal year, the
Administration shall distribute the remaining
funds as follows:
(I) If the grant to any State is less
than the amount received by that State
in fiscal year 2000, the Administration
shall distribute such remaining funds,
on a pro rata basis, based on the
percentage of shortage of each such
State, as compared to the total amount
of such remaining funds available, to
the extent necessary in order to
increase the amount of the grant to the
amount received by that State in fiscal
year 2000, or until such funds are
exhausted, whichever first occurs.
(II) If any funds remain after the
application of subclause (I), the
remaining amount may be distributed as
supplemental grants to any State, as
the Administration determines, in its
discretion, to be appropriate, after
consultation with the association
referred to in subsection (a)(3)(A).
(v) Use of amounts.--
(I) In general.--Of the amounts made
available in any fiscal year to carry
out this section--
(aa) not more than $500,000
may be used by the
Administration to pay expenses
enumerated in subparagraphs (B)
through (D) of section
20(a)(1); and
(bb) not more than $500,000
may be used by the
Administration to pay the
examination expenses enumerated
in section 20(a)(1)(E).
(II) Limitation.--No funds described
in subclause (I) may be used for
examination expenses under section
20(a)(1)(E) if the usage would reduce
the amount of grants made available
under clause (i)(I) of this
subparagraph to less than $85,000,000
(after excluding any amounts provided
in appropriations Acts, or accompanying
report language, for specific
institutions or for purposes other than
the general small business development
center program) or would further reduce
the amount of such grants below such
amount.
(vi) Exclusions.--Grants provided to a State
by the Administration or another Federal agency
to carry out subsection (a)(6) or (c)(3)(G), or
for supplemental grants set forth in clause
(iv)(II) of this subparagraph, shall not be
included in the calculation of maximum funding
for a State under clause (ii) of this
subparagraph.
(vii) Authorization of appropriations.--There
are authorized to be appropriated to carry out
this subparagraph--
(I) $130,000,000 for fiscal year
2005; and
(II) $135,000,000 for fiscal year
2006.
(viii) Limitation.--From the funds
appropriated pursuant to clause (vii), the
Administration shall reserve not less than
$1,000,000 in each fiscal year to develop
portable assistance for startup and
sustainability non-matching grant programs to
be conducted by eligible small business
development centers in communities that are
economically challenged as a result of a
business or government facility down sizing or
closing, which has resulted in the loss of jobs
or small business instability. A non-matching
grant under this clause shall not exceed
$100,000, and shall be used for small business
development center personnel expenses and
related small business programs and services.
(ix) State defined.--In this subparagraph,
the term ``State'' means each of the several
States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin
Islands, Guam, and American Samoa.
(5) Federal contracts with small business development
centers.--
(A) In general.--Subject to the conditions set forth
in subparagraph (B), a small business development
center may enter into a contract with a Federal
department or agency to provide specific assistance to
small business concerns.
(B) Contract prerequisites.--Before bidding on a
contract described in subparagraph (A), a small
business development center shall receive approval from
the Associate Administrator of the small business
development center program of the subject and general
scope of the contract. Each approval under subparagraph
(A) shall be based upon a determination that the
contract will provide assistance to small business
concerns and that performance of the contract will not
hinder the small business development center in
carrying out the terms of the grant received by the
small business development center from the
Administration.
(C) Exemption from matching requirement.--A contract
under this paragraph shall not be subject to the
matching funds or eligibility requirements of paragraph
(4).
(D) Additional provision.--Notwithstanding any other
provision of law, a contract for assistance under this
paragraph shall not be applied to any Federal
department or agency's small business, woman-owned
business, or socially and economically disadvantaged
business contracting goal under section 15(g).
(6) Any applicant which is funded by the
Administration as a Small Business Development Center
may apply for an additional grant to be used solely to
assist--
(A) with the development and enhancement of
exports by small business concerns;
(B) in technology transfer; and
(C) with outreach, development, and
enhancement of minority-owned small business
startups or expansions, HUBZone small business
concerns, veteran-owned small business startups
or expansions, and women-owned small business
startups or expansions, in communities impacted
by base closings or military or corporate
downsizing, or in rural or underserved
communities;
as provided under subparagraphs (B) through (G) of
subsection (c)(3). Applicants for such additional
grants shall comply with all of the provisions of this
section, including providing matching funds, except
that funding under this paragraph shall be effective
for any fiscal year to the extent provided in advance
in appropriations Acts and shall be in addition to the
dollar program limitations specified in paragraphs (4)
and (5). No recipient of funds under this paragraph
shall receive a grant which would exceed its pro rata
share of a $15,000,000 program based upon the
populations to be served by the Small Business
Development Center as compared to the total population
of the United States. The minimum amount of eligibility
for any State shall be $100,000.
(7) Privacy requirements.--
(A) In general.--A small business development
center, consortium of small business
development centers, or contractor or agent of
a small business development center may not
disclose the name, address, or telephone number
of any individual or small business concern
receiving assistance under this section without
the consent of such individual or small
business concern, unless--
(i) the Administrator is ordered to
make such a disclosure by a court in
any civil or criminal enforcement
action initiated by a Federal or State
agency; or
(ii) the Administrator considers such
a disclosure to be necessary for the
purpose of conducting a financial audit
of a small business development center,
but a disclosure under this clause
shall be limited to the information
necessary for such audit.
(B) Administrator use of information.--This
section shall not--
(i) restrict Administrator access to
program activity data; or
(ii) prevent the Administrator from
using client information to conduct
client surveys.
(C) Regulations.--
(i) In general.--The Administrator
shall issue regulations to establish
standards--
(I) for disclosures with
respect to financial audits
under subparagraph (A)(ii); and
(II) for client surveys under
subparagraph (B)(ii), including
standards for oversight of such
surveys and for dissemination
and use of client information.
(ii) Maximum privacy protection.--
Regulations under this subparagraph,
shall, to the extent practicable,
provide for the maximum amount of
privacy protection.
(iii) Inspector general.--Until the
effective date of regulations under
this subparagraph, any client survey
and the use of such information shall
be approved by the Inspector General
who shall include such approval in his
semi-annual report.
(8) Cybersecurity assistance.--
(A) In general.--The Department of Homeland
Security, and any other Federal department or
agency in coordination with the Department of
Homeland Security, may leverage small business
development centers to provide assistance to
small business concerns by disseminating
information relating to cybersecurity risks and
other homeland security matters to help small
business concerns in developing or enhancing
cybersecurity infrastructure, awareness of
cyber threat indicators, and cyber training
programs for employees.
(B) Definitions.--In this paragraph, the
terms ``cybersecurity risk'' and ``cyber threat
indicator'' have the meanings given such terms,
respectively, under section 227(a) of the
Homeland Security Act of 2002 (6 U.S.C.
148(a)).
(b)(1) Financial assistance shall not be made available to
any applicant if approving such assistance would be
inconsistent with a plan for the area involved which has been
adopted by an agency recognized by the State government as
authorized to do so and approved by the Administration in
accordance with the standards and requirements established
pursuant to this section.
(2) An applicant may apply to participate in the program by
submitting to the Administration for approval a plan naming
those authorized in subsection (a) to participate in the
program, the geographic area to be served, the services that it
would provide, the method for delivering services, a budget,
and any other information and assurances the Administration may
require to insure that the applicant will carry out the
activities eligible for assistance. The Administration is
authorized to approve, conditionally approve or reject a plan
or combination of plans submitted. In all cases, the
Administration shall review plans for conformity with the plan
submitted pursuant to paragraph (1) of this subsection, and
with a view toward providing small business with the most
comprehensive and coordinated assistance in the State or part
thereof to be served.
(3) Assistance to out-of-state small business
concerns.--
(A) In general.--At the discretion of the
Administration, the Administration is
authorized to permit a small business
development center to provide advice,
information and assistance, as described in
subsection (c), to small businesses located
outside the State, but only to the extent such
businesses are located within close
geographical proximity to the small business
development center, as determined by the
Administration.
(B) Disaster recovery assistance.--
(i) In general.--At the discretion of
the Administrator, the Administrator
may authorize a small business
development center to provide advice,
information, and assistance, as
described in subsection (c), to a small
business concern located outside of the
State, without regard to geographic
proximity to the small business
development center, if the small
business concern is located in an area
for which the President has declared a
major disaster.
(ii) Term.--
(I) In general.--A small
business development center may
provide advice, information,
and assistance to a small
business concern under clause
(i) for a period of not more
than 2 years after the date on
which the President declared a
major disaster for the area in
which the small business
concern is located.
(II) Extension.--The
Administrator may, at the
discretion of the
Administrator, extend the
period described in subclause
(I).
(iii) Continuity of services.--A
small business development center that
provides counselors to an area
described in clause (i) shall, to the
maximum extent practicable, ensure
continuity of services in any State in
which the small business development
center otherwise provides services.
(iv) Access to disaster recovery
facilities.--For purposes of this
subparagraph, the Administrator shall,
to the maximum extent practicable,
permit the personnel of a small
business development center to use any
site or facility designated by the
Administrator for use to provide
disaster recovery assistance.
(c)(1) Applicants receiving grants under this section shall
assist small businesses in solving problems concerning
operations, manufacturing, engineering, technology exchange and
development, personnel administration, marketing, sales,
merchandising, finance, accounting, business strategy
development, and other disciplines required for small business
growth and expansion, innovation, increased productivity, and
management improvement, and for decreasing industry economic
concentrations. Applicants receiving grants under this section
may also assist small businesses by providing, where
appropriate, education on the requirements applicable to small
businesses under the regulations issued under section 38 of the
Arms Export Control Act (22 U.S.C. 2778) and on compliance with
those requirements.
(2) A small business development center shall provide
services as close as possible to small businesses by providing
extension services and utilizing satellite locations when
necessary. The facilities and staff of each Small Business
Development Center shall be located in such places as to
provide maximum accessibility and benefits to the small
businesses which the center is intended to serve. To the extent
possible, it also shall make full use of other Federal and
State government programs that are concerned with aiding small
business. A small business development center shall have--
(A) a full-time staff, including a full-time director
who shall have the authority to make expenditures under
the center's budget and who shall manage the program
activities;
(B) access to business analysts to counsel, assist,
and inform small business clients;
(C) access to technology transfer agent to provide
state or art technology to small businesses through
coupling with national and regional technology data
sources;
(D) access to information specialists to assist in
providing information searches and referrals to small
business;
(E) access to part-time professional specialists to
conduct research or to provide counseling assistance
whenever the need arises;
(F) access to laboratory and adaptive engineering
facilities; and
(G) access to cybersecurity specialists to counsel,
assist, and inform small business concern clients, in
furtherance of the Small Business Development Center
Cyber Strategy developed under section 1841(a) of the
National Defense Authorization Act for Fiscal Year
2017.
(3) Services provided by a small business development center
shall include, but shall not be limited to--
(A) furnishing one-to-one individual counseling to
small businesses, including--
(i) working with individuals to increase
awareness of basic credit practices and credit
requirements;
(ii) working with individuals to develop
business plans, financial packages, credit
applications, and contract proposals;
(iii) working with the Administration to
develop and provide informational tools for use
in working with individuals on pre-business
startup planning, existing business expansion,
and export planning; and
(iv) working with individuals referred by the
local offices of the Administration and
Administration participating lenders;
(B) assisting in technology transfer, research and
development, including applied research, and coupling
from existing sources to small businesses, including--
(i) working to increase the access of small
businesses to the capabilities of automated
flexible manufacturing systems;
(ii) working through existing networks and
developing new networks for technology transfer
that encourage partnership between the small
business and academic communities to help
commercialize university-based research and
development and introduce university-based
engineers and scientists to their counterparts
in small technology-based firms; and
(iii) exploring the viability of developing
shared production facilities, under appropriate
circumstances;
(C) in cooperation with the Department of Commerce
and other relevant Federal agencies, actively assisting
small businesses in exporting by identifying and
developing potential export markets, facilitating
export transactions, developing linkages between United
States small business firms and prescreened foreign
buyers, assisting small businesses to participate in
international trade shows, assisting small businesses
in obtaining export financing, and facilitating the
development or reorientation of marketing and
production strategies; where appropriate, the Small
Business Development Center and the Administration may
work in cooperation with the State to establish a State
international trade center for these purposes;
(D) developing a program in conjunction with the
Export-Import Bank and local and regional
Administration offices that will enable Small Business
Development Centers to serve as an information network
and to assist small business applicants for Export-
Import Bank financing programs, and otherwise identify
and help to make available export financing programs to
small businesses;
(E) working closely with the small business
community, small business consultants, State agencies,
universities and other appropriate groups to make
translation services more readily available to small
business firms doing business, or attempting to develop
business, in foreign markets;
(F) in providing assistance under this subsection,
applicants shall cooperate with the Department of
Commerce and other relevant Federal agencies to
increase access to available export market information
systems, including the CIMS system;
(G) assisting small businesses to develop and
implement strategic business plans to timely and
effectively respond to the planned closure (or
reduction) of a Department of Defense facility within
the community, or actual or projected reductions in
such firms' business base due to the actual or
projected termination (or reduction) of a Department of
Defense program or a contract in support of such
program--
(i) by developing broad economic assessments
of the adverse impacts of--
(I) the closure (or reduction) of the
Department of Defense facility on the
small business concerns providing goods
or services to such facility or to the
military and civilian personnel
currently stationed or working at such
facility; and
(II) the termination (or reduction)
of a Department of Defense program (or
contracts under such program) on the
small business concerns participating
in such program as a prime contractor,
subcontractor or supplier at any tier;
(ii) by developing, in conjunction with
appropriate Federal, State, and local
governmental entities and other private sector
organizations, the parameters of a transition
adjustment program adaptable to the needs of
individual small business concerns;
(iii) by conducting appropriate programs to
inform the affected small business community
regarding the anticipated adverse impacts
identified under clause (i) and the economic
adjustment assistance available to such firms;
and
(iv) by assisting small business concerns to
develop and implement an individualized
transition business plan.
(H) maintaining current information concerning
Federal, State, and local regulations that affect small
businesses and counsel small businesses on methods of
compliance. Counseling and technology development shall
be provided when necessary to help small businesses
find solutions for complying with environmental,
energy, health, safety, and other Federal, State, and
local regulations;
(I) coordinating and conducting research into
technical and general small business problems for which
there are no ready solutions;
(J) providing and maintaining a comprehensive library
that contains current information and statistical data
needed by small businesses;
(K) maintaining a working relationship and open
communications with the financial and investment
communities, legal associations, local and regional
private consultants, and local and regional small
business groups and associations in order to help
address the various needs of the small business
community;
(L) conducting in-depth surveys for local small
business groups in order to develop general information
regarding the local economy and general small
businesses strengths and weaknesses in the locality;
(M) in cooperation with the Department of Commerce,
the Administration and other relevant Federal agencies,
actively assisting rural small businesses in exporting
by identifying and developing potential export markets
for rural small businesses, facilitating export
transactions for rural small businesses, developing
linkages between United States' rural small businesses
and prescreened foreign buyers, assisting rural small
businesses to participate in international trade shows,
assisting rural small businesses in obtaining export
financing and developing marketing and production
strategies;
(N) assisting rural small businesses--
(i) in developing marketing and production
strategies that will enable them to better
compete in the domestic market--
(ii) by providing technical assistance needed
by rural small businesses;
(iii) by making available managerial
assistance to rural small business concerns;
and
(iv) by providing information and assistance
in obtaining financing for business startups
and expansion;
(O) in conjunction with the United States Travel and
Tourism Administration, assist rural small business in
developing the tourism potential of rural communities
by--
(i) identifying the cultural, historic,
recreational, and scenic resources of such
communities;
(ii) providing assistance to small businesses
in developing tourism marketing and promotion
plans relating to tourism in rural areas; and
(iii) assisting small business concerns to
obtain capital for starting or expanding
businesses primarily serving tourists;
(P) maintaining lists of local and regional private
consultants to whom small business can be referred;
(Q) providing information to small business concerns
regarding compliance with regulatory requirements;
(R) developing informational publications,
establishing resource centers of reference materials,
and distributing compliance guides published under
section 312(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996;
(S) providing small business owners with access to a
wide variety of export-related information by
establishing on-line computer linkages between small
business development centers and an international trade
data information network with ties to the Export
Assistance Center program; and
(T) providing information and assistance to small
business concerns with respect to establishing drug-
free workplace programs on or before October 1, 2006.
(4) A small business development center shall continue to
upgrade and modify its services, as needed, in order to meet
the changing and evolving needs of the small business
community.
(5) In addition to the methods prescribed in section
21(c)(2), a small business development center shall utilize and
compensate as one of its resources qualified small business
vendors, including but not limited to, private management
consultants, private consulting engineers and private testing
laboratories, to provide services as described in this
subsection to small businesses on behalf of such small business
development center.
(6) In any State (A) in which the Administration has not made
a grant pursuant to paragraph (1) of subsection (a), or (B) in
which no application for a grant has been made by a Small
Business Development Center pursuant to paragraph (6) of such
subsection within 60 days after the effective date of any grant
under subsection (a)(1) to such center or the date the
Administration notifies the grantee funded under subsection
(a)(1) that funds are available for grant applications pursuant
to subsection (a)(6), whichever date occurs last, the
Administration may make grants to a non-profit entity in that
State to carry out the activities specified in paragraph (6) of
subsection (a). Any such applicants shall comply with the
matching funds requirement of paragraph (4) of subsection (a).
Such grants shall be effective for any fiscal year only to the
extent provided in advance in appropriations Acts, and each
State shall be limited to the pro rata share provisions of
paragraph (6) of subsection (a).
(7) In performing the services identified in
paragraph (3), the Small Business Development Centers
shall work in close cooperation with the
Administration's regional and local offices, the local
small business community, and appropriate State and
local agencies.
(8) The Associate Administrator for Small Business
Development Centers, in consultation with the Small
Business Development Centers, shall develop and
implement an information sharing system. Subject to
amounts approved in advance in appropriations Acts, the
Administration may make grants or enter cooperative
agreements with one or more centers to carry out the
provisions of this paragraph. Said grants or
cooperative agreements shall be awarded for periods of
no more than five years duration. The matching funds
provisions of subsection (a) shall not be applicable to
grants or cooperative agreements under this paragraph.
The system shall--
(A) allow Small Business Development Centers
participating in the program to exchange
information about their programs; and
(B) provide information central to technology
transfer.
(d) Where appropriate, the Small Business Development Centers
shall work in conjunction with the relevant State agency and
the Department of Commerce to develop a comprehensive plan for
enhancing the export potential of small businesses located
within the State. This plan may involve the cofunding and
staffing of a State Office of International Trade within the
State Small Business Development Center, using joint State and
Federal funding, and any other appropriate measures directed at
improving the export performance of small businesses within the
State.
(e) Laboratories operated and funded by the Federal
Government are authorized and directed to cooperate with the
Administration in developing and establishing programs to
support small business development centers by making facilities
and equipment available; providing experiment station
capabilities in adaptive engineering; providing library and
technical information processing capabilities; and providing
professional staff for consulting. The Administration is
authorized to reimburse the laboratories for such services.
(f) The National Science Foundation is authorized and
directed to cooperate with the Administration and with the
Small Business Development Centers in developing and
establishing programs to support the centers.
(g) National Aeronautics and Space Administration and
Regional Technology Transfer Centers.--The National Aeronautics
and Space Administration and regional technology transfer
centers supported by the National Aeronautics and Space
Administration are authorized and directed to cooperate with
small business development centers participating in the
program.
(h) Associate Administrator for Small Business Development
Centers.--
(1) Appointment and compensation.--The Administrator
shall appoint an Associate Administrator for Small
Business Development Centers who shall report to an
official who is not more than one level below the
Office of the Administrator and who shall serve without
regard to the provisions of title 5, governing
appointments in the competitive service, and without
regard to chapter 51, and subchapter III of chapter 53
of such title relating to classification and General
Schedule pay rates, but at a rate not less than the
rate of GS-17 of the General Schedule.
(2) Duties.--
(A) In general.--The sole responsibility of
the Associate Administrator for Small Business
Development Centers shall be to administer the
small business development center program.
Duties of the position shall include
recommending the annual program budget,
reviewing the annual budgets submitted by each
applicant, establishing appropriate funding
levels therefore, selecting applicants to
participate in this program, implementing the
provisions of this section, maintaining a
clearinghouse to provide for the dissemination
and exchange of information between small
business development centers and conducting
audits of recipients of grants under this
section.
(B) Consultation requirements.--In carrying
out the duties described in this subsection,
the Associate Administrator shall confer with
and seek the advice of the Board established by
subsection (i) and Administration officials in
areas served by the small business development
centers; however, the Associate Administrator
shall be responsible for the management and
administration of the program and shall not be
subject to the approval or concurrence of such
Administration officials.
(i)(1) There is established a National Small Business
Development Center Advisory Board (herein referred to as
``Board'') which shall consist of nine members appointed from
civilian life by the Administrator and who shall be persons of
outstanding qualifications known to be familiar and sympathetic
with small business needs and problems. No more than three
members shall be from universities or their affiliates and six
shall be from small businesses or associations representing
small businesses. At the time of the appointment of the Board,
the Administrator shall designate one-third of the members and
at least one from each category whose term shall end in two
years from the date of appointment, a second third whose term
shall end in three years from the date of appointment, and the
final third whose term shall end in four years from the date of
appointment. Succeeding Boards shall have three-year terms,
with one-third of the Board changing each year.
(2) The Board shall elect a Chairman and advise, counsel, and
confer with the Associate Administrator for Small Business
Development Centers in carrying out the duties described in
this section. The Board shall meet at least semiannually and at
the call of the Chairman of the Board. Each member of the Board
shall be entitled to be compensated at the rate not in excess
of the per diem equivalent of the highest rate of pay for
individuals occupying the position under GS-18 of the General
Schedule for each day engaged in activities of the Board and
shall be entitled to be reimbursed for expenses as a member of
the Board.
(j)(1) Each small business development center shall establish
an advisory board.
(2) Each small business development center advisory board
shall elect a chairman and advise, counsel, and confer with the
director of the small business development center on all policy
matters pertaining to the operation of the small business
development center, including who may be eligible to receive
assistance from, and how local and regional private consultants
may participate with the small business development center.
(k) Program Examination and Accreditation.--
(1) Examination.--Not later than 180 days after the
date of enactment of this subsection, the
Administration shall develop and implement a biennial
programmatic and financial examination of each small
business development center established pursuant to
this section.
(2) Accreditation.--The Administration may provide
financial support, by contract or otherwise, to the
association authorized by subsection (a)(3)(A) for the
purpose of developing a small business development
center accreditation program.
(3) Extension or renewal of cooperative agreements.--
(A) In general.--In extending or renewing a
cooperative agreement of a small business
development center, the Administration shall
consider the results of the examination and
accreditation program conducted pursuant to
paragraphs (1) and (2).
(B) Accreditation requirement.--After
September 30, 2000, the Administration may not
renew or extend any cooperative agreement with
a small business development center unless the
center has been approved under the
accreditation program conducted pursuant to
this subsection, except that the Associate
Administrator for Small Business Development
Centers may waive such accreditation
requirement, in the discretion of the Associate
Administrator, upon a showing that the center
is making a good faith effort to obtain
accreditation.
(l) Contract Authority.--The authority to enter into
contracts shall be in effect for each fiscal year only to the
extent and in the amounts as are provided in advance in
appropriations Acts. After the administration has entered a
contract, either as a grant or a cooperative agreement, with
any applicant under this section, it shall not suspend,
terminate, or fail to renew or extend any such contract unless
the Administration provides the applicant with written
notification setting forth the reasons therefore and affording
the applicant an opportunity for a hearing, appeal, or other
administrative proceeding under the provisions of chapter 5 of
title 5, United States Code. If any contract or cooperative
agreement under this section with an entity that is covered by
this section is not renewed or extended, any award of a
successor contract or cooperative agreement under this section
to another entity shall be made on a competitive basis.
(m) Prohibition on Certain Fees.--A small business
development center shall not impose or otherwise collect a fee
or other compensation in connection with the provision of
counseling services under this section.
(n) Veterans Assistance and Services Program.--
(1) In general.--A small business development center
may apply for a grant under this subsection to carry
out a veterans assistance and services program.
(2) Elements of program.--Under a program carried out
with a grant under this subsection, a small business
development center shall--
(A) create a marketing campaign to promote
awareness and education of the services of the
center that are available to veterans, and to
target the campaign toward veterans, service-
disabled veterans, military units, Federal
agencies, and veterans organizations;
(B) use technology-assisted online counseling
and distance learning technology to overcome
the impediments to entrepreneurship faced by
veterans and members of the Armed Forces; and
(C) increase coordination among organizations
that assist veterans, including by establishing
virtual integration of service providers and
offerings for a one-stop point of contact for
veterans who are entrepreneurs or owners of
small business concerns.
(3) Amount of grants.--A grant under this subsection
shall be for not less than $75,000 and not more than
$250,000.
(4) Funding.--Subject to amounts approved in advance
in appropriations Acts, the Administration may make
grants or enter into cooperative agreements to carry
out the provisions of this subsection.
(o) Cyber Strategy Training for Small Business Development
Centers.--
(1) Definitions.--In this subsection--
(A) the term ``cyber strategy'' means
resources and tactics to assist in planning for
cybersecurity and defending against cyber risks
and cyber attacks; and
(B) the term ``lead small business
development center'' means a small business
development center that has received a grant
from the Administration.
(2) Certification program.--The Administrator shall
establish a cyber counseling certification program, or
approve a similar existing program, to certify the
employees of lead small business development centers to
provide cyber planning assistance to small business
concerns.
(3) Number of certified employees.--The Administrator
shall ensure that the number of employees of each lead
small business development center who are certified in
providing cyber planning assistance under this
subsection is not fewer than the lesser of--
(A) 5; or
(B) 10 percent of the total number of
employees of the lead small business
development center.
(4) Consideration of small business development
center cyber strategy.--In carrying out this
subsection, the Administrator, to the extent
practicable, shall consider any cyber strategy methods
included in the Small Business Development Center Cyber
Strategy developed under section 1841(a) of the
National Defense Authorization Act for Fiscal Year 2017
(Public Law 114-328; 130 Stat. 2662).
(5) Reimbursement for certification.--
(A) In general.--Subject to the availability
of appropriations and subparagraph (B), the
Administrator shall reimburse a lead small
business development center for costs relating
to the certification of an employee of the lead
small business development center under the
program established under paragraph (2).
(B) Limitation.--The total amount reimbursed
by the Administrator under subparagraph (A) may
not exceed $350,000 in any fiscal year.
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